This case involved a challenge to a co-management agreement between D.F.O. andthe East Coast (zone 12) snow crab fishermen. It is reported that as a result of changes to the Unemployment Insurance Act in 1995, it became apparent that numerous employees working in snow crab processing plants were not going to be able to work the minimum number of weeks required to qualify for unemployment insurance benefits. Consequently, D.F.O. initiated discussions with the zone 12 crab fishermen for the purpose of obtaining a contribution of funds from them to be used with other funds contributed by the Provincial Government for the purpose of creating make work projects for the shore workers. As a result of these discussions, the crab fisherman entered into a co-management or partnering type agreement to provide a percentage of their gross revenue to the shore workers.
Pursuant to this agreement, a procedure for collecting funds was set up as follows: Each year, D.F.O. with-held 20 per cent of the fishermen’s quota and transferred it to a non profit corporation. Upon payment by each fisherman to the non-profit corporation, the corporation would notify D.F.O. and then transfer the payment to a second non-profit corporation. Upon transfer of the money, the fisherman’s share of the with-held quota would then be released.
Although legislation was tabled in Parliament to authorize this type of co-management or partnering agreement (Bill C-62), this legislation died on the order paper when Parliament was dissolved in April of 1997. Despite the failure to pass this legislation, the crab fishermen honoured this agreement and paid the levy for several years until they received an opinion from the Auditor General that the levy was of questionable legality. They then decided to challenge the levy imposed for the 2001 fishery by way of an application to the Federal Court for judicial review.
Upon reviewing the case, the court looked at the question of whether the conditional licences issued to the non-profit corporation (presumably to hold he 20 per cent quota) could be authorized under s. 7 of the Fisheries Act. In rejecting the Minister’s discretion to do so, the court said as follows:
There is evidence that the licences for snow crab fishing were issued to the ‘Partenariat’ [the non profit corporation] who owned no fishing vessel and were not engaged in the fishing industry. Though the Minister has absolute discretion, it is specified that he may issue licences for fisheries or fishing, not for the purpose of assisting in setting up an unemployment benefit scheme and collecting additional levies. The Minister’s conduct in this regard is not supported by any authority nor is it justified for any statutory purpose. The Fisheries Act is to protect and regulate fisheries and this was undoubtedly beyond the scope of the Minister’s discretion (para. 43)
. . . I am satisfied that the Minister did not act in good faith (para. 45)
A regime established for the purpose of offering financial aid to seasonal employees for area fish plants who no longer qualify for employement insurance benefits is wholly unrelated to the issuance of leases or licences for the proper management and control of fisheries and conservation and protection of fish (para. 46).
In addition, in the absence of either an authorization from Cabinet or enabling legislation, the court also questioned the ability of the Minister to enter into legally binding contracts to fetter his discretion under s. 7 of the Fisheries Act.
As a result of the court’s conclusions, it issued an order prohibiting the implementation of the partnering agreement and setting aside the decision of the Minister transferring 20 per cent of the quota to the non profit corporation.
Editor’s Note: In the Report of the Panel on Studying Partnership released in 1998 (www.dof-mpo.gc.ca/COMMUNIC/backgrou/1998/hq90_e.htm), a letter from the Deputy Minister of Fisheries is quoted as confirming that the Minister of Fisheries lacks the legal authority to enter into partnering arrangements. Despite this fact, the Minister appears to have proceeded with a number of partnering arrangements on both the East coast and the West coast without passing any new legislation to authorize it. Given this fact, it is not surprising to see this agreement being struck down by the courts.